Who likes puzzles? Help me piece together a deal.

[Account Closed]

Hi BP,

     I am preparing to ask a relative to sell me his small multifamily residential property in the city of Houston. He's getting ready to retire and move out of the city. I'm going to ask him to sell his property to me. My family of four will be living in one unit. It will be a bit cramped in a 2/1, so I only want to live there for 1-3 years. Please help me think through some practical options for structuring a deal to get in, and also how to move beyond this property in the future. I want to be able to clearly visualize and understand 3 ways to get in, and 3 ways to get out. I am just starting out. If this works, it will be my first deal.

Our current financial position:

  My husband and I have no debt. Our credit scores are over 800. I have a little over $10k liquid between my savings and taxable brokerage accounts. I am saving into these accounts at a combined rate of $450+/mo. We can borrow up to about $30k from his 401k. I have $7.5k principal I can withdraw from a ROTH IRA. He has about $7k in another IRA from a previous employer. My husband has some company stock that will be fully vested this year. I don't know how much, but his company pays excellent dividends. We are both veterans and can qualify for a VA loan. We are currently renting. I believe we should be able to fund a real estate deal. I am open to insights on which buckets to draw from and why.

The property I'm interested in:

It's a 3 unit multifamily. Comps in the area indicate market value for the property is about $350k. Rentometer estimates market rents are about $1350 for each of the two 2/1 units and $880 for the garage apartment. Since we'd be living in one of the 2/1s, that leaves about $2230 to help us with the note, etc. My husband estimates the tax bill for 2018 to be about $12k. It's well maintained, and I am certain it can qualify for a VA loan. There's not a lot of value add opportunity. I doubt it's separately metered. I have no landlord experience.

My thoughts so far:

   I plan to ask for seller financing. This way he can continue to receive income from the property, but he won't have to manage it from out-of-town, and this spreads out his tax burden. If I'm paying him directly, then he will have a vested interest in seeing me succeed and I'm less likely to be bashful about approaching him with land-lording questions as they arise. I am good at self educating, but there is no substitute for experience.

I'm thinking I can later cash-out refinance into a loan (possibly a VA loan) to finance another deal and wrap the new mortgage so as to keep the installment payments in place and avoid hitting my retiring family member with a big fat tax bill.

I welcome any and all insights from experienced investors. Thanks in advance.

Liz